What a fascinating year we have just experienced in the roofing industry!
As the economy continues to rebound, the residential construction business (which did not participate in the recent recession) continues to operate at record levels. That rebounding economy has (finally!) begun to re-energize commercial construction and reroofing. While this is certainly good news, clouds are looming on the horizon.
There were signs earlier this year that inflation may become a new buzzword in our trade (Editor's Note, June 2004), but right when it seemed that metal and other commodity prices might actually level off, rapidly rising iso prices caught many by surprise. In addition, increasing prices and decreasing availability in the insurance market are reaching crisis proportions in some areas of the country.
It is great that the economy is improving and it looks like 2005 might be a pretty good year for the roofing business. The problem is that you have to be able to stay in the business to take advantage of it!
No magic bullets, but here are a couple of things you may wish to consider in these times of rapid change:
You must be more selective in choosing which jobs you will bid. By most accounts there will be plenty of business, but there may not be enough material to go around (at least as quickly as you or your clients may want it). Focus on your core clients and your core business. Reaching out to conquer new territory or new business will require a high level of strategic planning next year. Not that it is impossible, it is just that most of us should be able to have a nice increase by focusing on our base business and the basic blocking and tackling involved in running our business. Another thing to consider is that as your business grows, prices rise and insurance rates skyrocket, your needs for capital will increase as well. Be sure your financiers are ready to back you in the year to come.
It may sound like the opposite of point one, but you must be prepared to offer your clients sound alternatives when it comes to building a quality roof in times when certain materials may be scarce and pricey. This may be a year when alternatives to base specifications become the norm instead of the exception. Stick with products and services you know and trust, but be prepared to participate in the process to engineer around spot shortages and other issues that may arise.
You must continue to focus on safety and quality on the job. I believe our industry is in the midst of a quiet renaissance in the area of safety, particularly fall protection. In spite of the difficulties that the insurance industry is facing and its approach to contractors that sometimes seems punitive, we really are partners with them. We must continue to improve on keeping losses to a bare minimum. Remember, too, that our insurers had their share of difficulties before the hurricanes hit Florida this year, and the tab they face will manifest itself across the breadth of everything they do in 2005.
You must get paid for what you do. Now, more than ever, you need to review your pricing structure and watch every new contract like a hawk. You must get paid not only for the work you do, but also for the overhead it takes to run your roofing business now and for the future. You must get paid to start and continue the safety and quality initiatives that it will take to continuously improve your business and the roofing industry as a whole.
As the end of 2004 approaches, I would like to thank you for reading our magazine, visiting our Web site, using our BizLink search engine, buying products from our advertisers, perusing our Buyers Guide, and attending our Best of Success seminar. Best wishes to you and yours for the Holiday Season and in the coming year!